Data is having its’ moment. CEO mindsets have shifted from viewing data as a tactical tool to embracing data as THE path to strategic, competitive advantage. In fact, the International Institute for Analytics predicted that, by 2020, businesses effectively using data will see $430 billion in productivity benefits over those not using data.
Those who leverage data strategically will be tomorrow’s market leaders, and the C-Suite is taking notice. In our last post, we talked about how adopting a company-wide data strategy can transform data from a tactical tool to your company’s powerful competitive advantage and positively impact your future trajectory.
So, how do you justify investment in a company-wide data strategy in “objective” terms for your CEO and C-suite?
First, it is highly beneficial to clarify the “leverage data strategically” concept with specific definitions and expectations that exist within the C-Suite. The concept of strategic means, well, strategic. In other words, hiring an additional data analyst or data strategist is not the answer. That’s a tactic.
A strategic approach is to extract data’s rich insights and leverage them proactively – across functional areas – to create seamless customer experiences and a real, sustainable competitive advantage. Once you have done your due diligence to level-set with the C-Suite on the “leverage data strategically” concept, it’s time to start crafting your business case.
Before you begin: Put yourself in your CEO’s shoes
In simple terms, a data strategy is your company-wide plan on how to optimize data: from acquiring, storing, cleansing, analyzing, managing, sharing and using data (and its’ actionable insights). Before we get into the key components of a data strategy, let’s talk about the foundational questions that need answers.
Your holistic data strategy will be mapped out in your business case and it all starts with the answer to one key question: “What challenge is your CEO/business trying to solve?“ (followed by “How does a comprehensive data strategy help us tackle and solve that challenge?”)
A clear understanding of your company’s vision and goals and the priorities of your CEO/C-Suite will set the context for your business case. These are the barometers of success that should be integrated throughout your business case. Translating how a comprehensive data strategy can solve priority business challenges is the key to making your business case relevant and compelling.
CASE STUDY: Hewlett Packard Enterprise (HPE) recently implemented a holistic data strategy in an effort to track their customers throughout their entire buyers’ journey. By unifying data company-wide, they were able to gain insights into their customers unique behaviors and preferences, resulting in key wins for the company. Read more here.
Your business case is a case for change. When making the case for change, justify the change. In other words, be prepared to identify hidden costs and blind spots that exist in the current status quo. While your financial metrics may be healthy, there is likely room to make them much healthier and more sustainable through optimized data management and data-driven capabilities. Answering the following questions in your business case will help you better articulate and justify the changes you’re asking for:
- “Why and how is this change better than our current state?”
- “How will this help us better meet our customer’s new and emerging needs?”
- “How passionately do/will customers care about us changing our current state?”
- “Why is this case more important than other priorities on our list?”
These answers will establish an objective case for change proactively, since change – while vital – is simultaneously challenging.
Getting started: Think like a business owner
At its’ basic level, a good business case guides a business owner through each stage of starting and managing a business by thinking through the key elements of that business. Nearly every new business starts at this basic level.
Your business case will serve nearly the same purpose by providing your CEO with a step-by-step justification for implementing a brand-new business approach. By the time you work through the different steps outlined below, you’ll have created a clearly defined roadmap for strategizing, implementing, and managing your new data strategy.
- Rationale and Market Analysis – As we’ve discussed, change is hard. This section will be your opportunity to win over the hearts and minds of your CEO and other key decision makers. You’ll do that by addressing the following:
- How is a data strategy different from the way your company is currently using data and why is that distinction important? Sharing relevant examples can be helpful.
- Be sure to share industry trends and how companies are using data strategies to their advantage.
- This is also the section where you should look at the data strategies of your competitors. Who is doing it well?
- Don’t forget to include an explanation of how can you gain an advantage by leveraging data.
- Business Impact – This is one of the most important sections in your plan and is where you’ll explain how adopting a data strategy will positively impact your business at every level and across every department. Remember that you’re not alone in this data journey! Gain additional internal support by partnering with key stakeholders in other departments to understand how they are currently using data and how a data strategy can help them.
- Organization and Management – A new data strategy will require a brand-new organizational structure to support it. In this section, you’ll describe that new structure in detail by answering the following questions:
- How will the new strategy be organized and managed within your department and throughout the company?
- Who will be responsible for each element?
- How will other teams receive the data insights they need to do their jobs?
- Who are your strategic partners in other departments?
- Technology Requirements – What does the technology infrastructure required to support this new strategy look like? Will it meet the data expectations of your organization in terms of speed and scale? If there are new tools required, be sure to outline them and explain exactly why they are needed.
- Financial Investment and Justification – So far, you’ve made a compelling case for your company’s new data strategy. Now it’s time to make an even more compelling case for financial buy-in. The more detailed you can be in how you came up with the number you’re asking for and how it will be allocated, the better. How will that investment pay off for your company in one quarter, two quarters, one year, two years, five years? Using charts and graphs will visually help to tell your story.
- Timeline and Conclusion – Wrap your business case up by describing how you’ll roll out the new data strategy. It’s always helpful to revisit some of the key justification points in this section as well.
Looking toward tomorrow
A data strategy is not something that you create and switch on overnight. It’s a months-long development process requiring top-down support and significant financial investment. The first step in the process is helping your CEO and other key decision makers understand why a data strategy is needed by creating a business case. The better you can articulate the potential value of a comprehensive data strategy in terms that matter to your business, the clearer your plan will be and the more successful its’ implementation.
Your Next Step: Once you gain approval for your business case, it will be time to begin to make your new data strategy a reality. Our next article will walk you through how to assess and map the state of your company’s current data and technology systems. The end result will be a visual map representing how your data is currently collected, stored, analyzed and used. This exercise will serve as a critical foundation to knowing where to augment technology and processes or deconstruct and rebuild as you move forward.